Bailout Doings Take Toll on Real Estate Funds

Losing 16.26% for the period, the ProFunds Real Estate UltraSector ProFund(REPSX Quote) had the second-worst week among real estate sector funds. One notable holding, CB Richard Ellis Group(CBG Quote), the world's largest commercial real estate broker and adviser to the FDIC on its real estate portfolio, complained of declining third-quarter office rents in London, New York City and Tokyo, and collapsed 27.72%.

Worst Performing Real Estate Funds for the Week Ending Thursday Dec. 4 Fund Ticker Rating Fund Type 1 Week Total Return DWS RREEF Real Estate Fund II Inc SRO D Closed-End -17.11% ProFunds Real Estate UltraSector ProFund REPSX E- Open-End -16.26% AssetMark Real Estate Securities Fund AFREX E+ Open-End -13.78% ProShares Ultra Real Estate URE E+ ETF -13.45% PowerShares FTSE RAFI Intl Real Estate Portfolio PRY U ETF -12.77% ING Clarion Global Real Estate Income Fund IGR D Closed-End -11.65% iShares FTSE EPRA/NAREIT Asia Index Fund IFAS U ETF -9.22% Cohen & Steers Advantage Income Realty Fund RLF D Closed-End -9.12% ING Asia-Pacific Real Estate Fund IAPAX U Open-End -9.11% Old Mutual Heitman REIT Fund OCRTX D- Open-End -9.05% Source: Bloomberg & TheStreet.com Ratings

The real estate outlook is not 100% negative. New mortgage applications doubled over the prior week as refinance volume more than tripled, according to the Mortgage Bankers Association. Paulson's proposal to offer subsidized 30-year fixed-rate mortgages at a 4.5% interest rate should be encouraging to qualified borrowers.

This is good news for the two ETFs tracking the homebuilders, iShares Dow Jones US Home Construction Index Fund(ITB Quote), up 6.39%; and SPDR S&P Homebuilders ETF(XHB Quote), up 4.60%.

Best Performing Real Estate Funds for the Week Ending Thursday Dec. 4 Fund Ticker Rating Fund Type 1 Week Total Return Nuveen Real Estate Income Fund JRS D+ Closed-End 8.18% Kensington Select Income Fund KIFAX E- Open-End 8.03% RMR Asia Real Estate Fund RAF E Closed-End 8.00% Neuberger Berman Real Estate Securities Income Fund NRO D  Closed-End 7.50% Alpine Global Premier Properties Fund AWP E- Closed-End 7.08% Cohen & Steers Premium Income Realty Fund Inc RPF D Closed-End 6.60% iShares Dow Jones US Home Construction Index Fund ITB D- ETF 6.39% RMR Hospitality and Real Estate Fund RHR D+ Closed-End 5.35% SPDR S&P Homebuilders ETF XHB D ETF 4.60% RMR Asia Pacific Real Estate Fund RAP D- Closed-End 4.51% Source: Bloomberg & TheStreet.com Ratings

For more information, check out an explanation of our ratings.